Late last week, the Federal Reserve tried to make it easier for banking organizations under its purview to hold troubled real estate for longer periods of time than usual through rentals – the REO-rental solution that some hope will stabilize residential markets. As we read it, the policy statement will make a major difference throughout the banking system, easing near-term stress on housing markets along with giving big BHCs a bit of an earnings boost when they hold lots of residential REO.

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